South African pgm production Rises

Production of pgms in South Africa increased by 2.6 per cent on a year-on-year basis in August, according to new figures.

Statistics South Africa revealed that pgms were the major contributor to overall mining output in the country rising by 10.4 per cent, with coal production up by 1.5 per cent.

The body also announced that mining production grew by 4.1 per cent in the quarter ended August 2010, while the value of mineral sales for the three months ended July 2010 were up by 8.2 per cent of R5.5 billion.

Johannes Khosa, an analyst at Nedbank Group, suggested that the short-term outlook for the mining sector is "still bleak", despite the latest positive results.

"The data is encouraging following weaker-than-expected manufacturing and retail sales data for August," he said in an interview with Business Day.

"However, we still believe that growth with slow during the second half of this year and into 2011."

Mr Khosa also suggested that another interest rate cut is "possible" in November, but claimed that the level is likely to be maintained until at least the first quarter of 2012.

South Africa is responsible for more than three-quarters of the world's platinum production.

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